Bonus Depreciation for Extended Returns

As discussed in our posts on March 5, 2024 and January 23, 2024, bonus depreciation for the 2023 tax year was reduced to 80% of the cost of eligible property. (This is down from 100% bonus depreciation that applied in the 2022 tax year and in recent prior years.)

There was a bill being considered by Congress that would retroactively change the bonus depreciation rules for the 2023 tax year, but the bill was recently defeated in the Senate, so it appears extremely unlikely that the bill will pass before the extended due date for 2023 tax returns.

As a result, returns that are on extension should use 80% bonus depreciation for eligible property placed in service during 2023.

It is still possible that future legislation could make retroactive changes to the bonus depreciation rules, and such changes could require taxpayers to amend returns that were already filed to reflect those changes.

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